Payroll conferees skirt the big issue

They bickered over boiler regulations, rambled about research and development credits and discussed the finer points of business expensing.

But there was one important matter the payroll tax conference committee didn’t debate Thursday: the payroll tax itself.

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Twenty-six days remain until the popular tax cut is set to expire for 160 million Americans. But the debate so far has been consumed by side issues.

And though the 20 negotiators stress that they all agree the tax holiday as well as jobless benefits and the Medicare reimbursement rate should be extended through 2012, they are avoiding the $64,000 question that stumped Congress in December: how to pay for it all.

Frustration with the lack of progress from the 20-member conference committee shot up to the highest levels of Congress on Thursday, when Senate Democratic leaders threatened to push their own bill if the House-Senate committee doesn’t get hustling.

Senate Democrats laid out essentially no specifics. But their grumbling reflects a growing sentiment that Congress, yet again, will wait until a deadline is hours away to act.

“If they’re unwilling to do something on a bipartisan basis, then we’re going to do something we can go forward with,” Senate Majority Leader Harry Reid (D-Nev.) warned.

Conferees say consensus is being reached, albeit slowly. The negotiators all agree that the 2 percent payroll tax cut needs to be extended through the end of the year. They concur on the need to extend the welfare program. And they all believe a tax provision allowing businesses to write off their investments should be preserved.

Rep. Dave Camp (R-Mich.) has stressed that the conference committee needs to solve policy differences first before shifting to the bigger question of how to pay for it all. But there’s dissension even on those issues: The two sides don’t appear close to resolving disagreements over whether to require people receiving unemployment benefits to enroll in a GED program, for example, or whether to include a provision rolling back boiler regulations that Republicans say would hurt job growth.

Still, “we’re moving forward on policy,” Camp told reporters. “I think it’s important to find out where we can find consensus on policy and then we’ll know what we have to do in terms of the pay-for side, but we don’t really have the full picture yet.”

Arguments over those proposals dominated the negotiations this week. And while one side made the other an offer on jobless benefits Thursday, it only skimmed the surface of a divisive issue.